Algeria ends desert siege with 23 hostages dead

ALGIERS/IN AMENAS, Algeria (Reuters) - Algerian troops ended a siege by Islamist militants at a gas plant in the Sahara desert where 23 hostages died, with a final assault which killed all the remaining hostage-takers.

Believed to be among the 32 dead militants was their leader, Abdul Rahman al-Nigeri, a Nigerien close to al Qaeda-linked commander Mokhtar Belmokhtar, presumed mastermind of the raid.

An Algerian interior ministry statement on the death toll gave no breakdown of the number of foreigners among hostages killed since the plant was seized before dawn on Wednesday.

Details are only slowly emerging on what happened during the siege, which marked a serious escalation of unrest in northwestern Africa, where French forces are ratcheting up a war against Islamist militants in neighboring Mali.

Algeria's interior ministry said on Saturday that 107 foreign hostages and 685 Algerian hostages had survived, but did not give a detailed breakdown of those who died.

"We feel a deep and growing unease ... we fear that over the next few days we will receive bad news," said Helge Lund, Chief Executive of Norway's Statoil, which ran the plant along with Britain's BP and Algeria's state oil company.

"People we have spoken to describe unbelievable, horrible experiences," he said.

British Prime Minister David Cameron said he feared for the lives of five British citizens unaccounted for at the gas plant near the town of In Amenas, which was also home to expatriate workers from Japanese engineering firm JGC Corp and others.

One American and one British citizen have been confirmed dead. Statoil said five of its workers, all Norwegian nationals, were still missing. Japanese and American workers are also unaccounted for.

The Islamists' attack has tested Algeria's relations with the outside world, exposed the vulnerability of multinational oil operations in the Sahara and pushed Islamist radicalism in northern Africa to center stage.

Some Western governments expressed frustration at not being informed of the Algerian authorities' plans to storm the complex. Algeria, scarred by a civil war with Islamist insurgents in the 1990s which claimed 200,000 lives, had insisted there would be no negotiation in the face of terrorism.

President Barack Obama said on Saturday the United States was seeking from Algerian authorities a fuller understanding of what took place, but said "the blame for this tragedy rests with the terrorists who carried it out."

Official sources had no immediate confirmation of newspaper reports suggesting some of the hostages may have been executed by their captors as the Algerian army closed in for the final assault on Saturday.

One source close to the crisis said 16 foreign hostages were freed, including two Americans and one Portuguese.

BP's chief executive Bob Dudley said on Saturday four of its 18 workers at the site were missing. The remaining 14 were safe.

PLANNED BEFORE FRENCH LANDED IN MALI

The attack on the heavily fortified gas compound was one of the most audacious in recent years and almost certainly planned long before French troops launched a military operation in Mali this month to stem an advance by Islamist fighters.

Hundreds of hostages escaped on Thursday when the army launched a rescue operation, but many hostages were killed.

Before the interior ministry released its provisional death toll, an Algerian security source said eight Algerians and at least seven foreigners were among the victims, including two Japanese, two Britons and a French national. One British citizen was killed when the gunmen seized the hostages on Wednesday.

The U.S. State Department said on Friday one American, Frederick Buttaccio, had died but gave no further details.

U.S. Defense Secretary Leon Panetta said nobody was going to attack the United States and get away with it.

"We have made a commitment that we're going to go after al Qaeda wherever they are and wherever they try to hide," he said during a visit to London. "We have done that obviously in Afghanistan, Pakistan, we've done it in Somalia, in Yemen and we will do it in North Africa as well."

Earlier on Saturday, Algerian special forces found 15 unidentified burned bodies at the plant, a source told Reuters.

Mauritanian news agencies identified the field commander of the group that attacked the plant as Nigeri, a fighter from one of the Arab tribes in Niger who had joined the Algerian Salafist Group for Preaching and Combat (GSPC) in early-2005.

That group eventually joined up with al Qaeda to become Al Qaeda in the Islamic Maghreb (AQIM). It and allied groups are the targets of the French military operation in Mali.

The news agencies described him as "one of the closest people" to Belmokhtar, who fought in Afghanistan and then in Algeria's civil war of the 1990s. Nigeri was known as a man for "difficult missions", having carried out attacks in Mauritania, Mali and Niger.

NO NEGOTIATION

Britain, Japan and other countries have expressed irritation that the Algerian army assault was ordered without consultation.

But French President Francois Hollande said the Algerian military's response seemed to have been the best option given that negotiation was not possible.

"When you have people taken hostage in such large number by terrorists with such cold determination and ready to kill those hostages - as they did - Algeria has an approach which to me, as I see it, is the most appropriate because there could be no negotiation," Hollande said.

The apparent ease with which the fighters swooped in from the dunes to take control of an important energy facility, which produces some 10 percent of the natural gas on which Algeria depends for its export income, has raised questions over the country's outwardly tough security measures.

Algerian officials said the attackers may have had inside help from among the hundreds of Algerians employed at the site.

Security in the half-dozen countries around the Sahara desert has long been a preoccupation of the West. Smugglers and militants have earned millions in ransom from kidnappings.

The most powerful Islamist groups operating in the Sahara were severely weakened by Algeria's secularist military in the civil war in the 1990s. But in the past two years the regional wing of al Qaeda gained fighters and arms as a result of the civil war in Libya, when arsenals were looted from Muammar Gaddafi's army.

(Additional reporting by Balazs Koranyi in Oslo, Estelle Shirbon and David Alexander in London, Brian Love in Paris; Writing by Giles Elgood and Myra MacDonald)

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WP will strengthen the voice of the opposition: Lee Li Lian

SINGAPORE: Workers' Party (WP) candidate for the Punggol East by-election, Lee Li Lian said having another WP member in Parliament will strengthen the voice of the opposition.

It means more airtime for the opposition to ask more questions on behalf of Singaporeans and this, she said will definitely make a difference.

Ms Lee refuted talk that having the WP members in Parliament did not make a difference, saying they have done an excellent job.

She was speaking to reporters after a morning walkabout at Rivervale Plaza.

- CNA/ck

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Srinagar-Jammu highway reopens

SRINAGAR: As the weather improved across the state on Sunday, the Srinagar-Jammu highway was reopened for one-way traffic after three days, an official said.

"Traffic will move from Jammu to Srinagar on the highway today (Sunday). Drivers are advised to drive cautiously as slippery road conditions exist at places on the highway," said an official of the traffic department.

As reports of non-availability of electric power continued to pour in from different parts of the Kashmir Valley, engineers of the power development department (PDD) said they had restored 80 percent supplies till Saturday evening.

"Our men are still on the restoration job, but we have already restored 80 percent supply," said a PDD engineer.

The weather office said no rain or snow was expected in the Kashmir Valley during the next 24 hours although cloudy conditions would continue during this period.

Kashmir University officials who had postponed all exams till Jan 19 have said that it would be held as per the announced schedule from Monday.

Air India Sunday will be operating a flight from winter capital Jammu to Leh town for the stranded passengers of Ladakh region, an official said.

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Lilly drug chosen for Alzheimer's prevention study

Researchers have chosen an experimental drug by Eli Lilly & Co. for a large federally funded study testing whether it's possible to prevent Alzheimer's disease in older people at high risk of developing it.

The drug, called solanezumab (sol-ah-NAYZ-uh-mab), is designed to bind to and help clear the sticky deposits that clog patients' brains.

Earlier studies found it did not help people with moderate to severe Alzheimer's but it showed some promise against milder disease. Researchers think it might work better if given before symptoms start.

"The hope is we can catch people before they decline," which can come 10 years or more after plaques first show up in the brain, said Dr. Reisa Sperling, director of the Alzheimer's center at Brigham and Women's Hospital in Boston.

She will help lead the new study, which will involve 1,000 people ages 70 to 85 whose brain scans show plaque buildup but who do not yet have any symptoms of dementia. They will get monthly infusions of solanezumab or a dummy drug for three years. The main goal will be slowing the rate of cognitive decline. The study will be done at 50 sites in the U.S. and possibly more in Canada, Australia and Europe, Sperling said.

In October, researchers said combined results from two studies of solanezumab suggested it might modestly slow mental decline, especially in patients with mild disease. Taken separately, the studies missed their main goals of significantly slowing the mind-robbing disease or improving activities of daily living.

Those results were not considered good enough to win the drug approval. So in December, Lilly said it would start another large study of it this year to try to confirm the hopeful results seen patients with mild disease. That is separate from the federal study Sperling will head.

About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Current medicines such as Aricept and Namenda just temporarily ease symptoms. There is no known cure.

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Online:

Alzheimer's info: http://www.alzheimers.gov

Alzheimer's Association: http://www.alz.org

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Armstrong Tearful Over Telling Kids Truth

Lance Armstrong, 41, began to cry today as he described finding out his son Luke, 13, was publicly defending him from accusations that he doped during his cycling career.

Armstrong said that he knew, at that moment, that he would have to publicly admit to taking performance-enhancing drugs and having oxygen-boosting blood transfusions when competing in the Tour de France. He made those admissions to Oprah Winfrey in a two-part interview airing Thursday and tonight.

"When this all really started, I saw my son defending me, and saying, 'That's not true. What you're saying about my dad? That's not true,'" Armstrong said, tearing up during the second installment of his interview tonight. "And it almost goes to this question of, 'Why now?'

"That's when I knew I had to talk," Armstrong said. "He never asked me. He never said, 'Dad, is this true?' He trusted me."

He told Winfrey that he sat down with his children over the holidays to come clean about his drug use.

"I said, 'Listen, there's been a lot of questions about your dad, about my career and whether I doped or did not dope,'" he said he told them. "'I always denied that. I've always been ruthless and defiant about that, which is why you defended me, which makes it even sicker' I said, 'I want you to know that it's true.'"

He added that his mother was "a wreck" over the scandal.

Armstrong said that the lowest point in his fall from grace and the top of the cycling world came when his cancer charity, Livestrong, asked him to consider stepping down.

George Burns/Harpo Studios, Inc.

Lance Armstrong-Winfrey Interview: How Honest Was He? Watch Video

Lance Armstrong-Winfrey Interview: Doping Confession Watch Video

After the U.S. Anti-Doping Agency alleged in October that Armstrong doped throughout his reign as Tour de France champion, Armstrong said, his major sponsors -- including Nike, Anheuser Busch and Trek -- called one by one to end their endorsement contracts with him.

"Everybody out," he said. "Still not the most humbling moment."

Then came the call from Livestrong, the charity he founded at age 25 when he was diagnosed with testicular cancer.

"The story was getting out of control, which was my worst nightmare," he said. "I had this place in my mind that they would all leave. The one I didn't think would leave was the foundation.

"That was most humbling moment," he said.

Armstrong first stepped down as chairman of the board for the charity before being asked to end his association with the charity entirely. Livestrong is now run independently of Armstrong.

"I don't think it was 'We need you to step down,' but, 'We need you to consider stepping down for yourself,'" he said, recounting the call. "I had to think about that a lot. None of my kids, none of my friends have said, 'You're out,' and the foundation was like my sixth child. To make that decision, to step aside, that was big."

In Thursday's interview installment, the seven-time winner of the Tour de France admitted publicly for the first time that he doped throughout his career, confirming after months of angry denials the findings of the U.S. Anti-Doping Agency, which stripped him of his titles in October.

He told Winfrey that he was taking the opportunity to confess to everything he had done wrong, including for years angrily denying claims that he had doped.

READ MORE: Armstrong Admits to Doping

WATCH: Armstrong's Many Denials Caught on Tape

READ MORE: 10 Scandalous Public Confessions

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Foreigners still trapped in Sahara hostage crisis

ALGIERS/IN AMENAS, Algeria (Reuters) - More than 20 foreigners were captive or missing inside a desert gas plant on Saturday, nearly two days after the Algerian army launched an assault to free them that saw many hostages killed.

The standoff between the Algerian army and al Qaeda-linked gunmen - one of the biggest international hostage crises in decades - entered its fourth day, having thrust Saharan militancy to the top of the global agenda.

The number and fate of victims has yet to be confirmed, with the Algerian government keeping officials from Western countries far from the site where their countrymen were in peril.

Reports put the number of hostages killed at between 12 to 30, with possibly dozens of foreigners still unaccounted for - among them Norwegians, Japanese, Britons, Americans and others.

State Department spokeswoman Victoria Nuland confirmed on Friday the death of one American, Frederick Buttaccio, in the hostage situation, but gave no further details.

Two Japanese, two Britons and a French national were among the seven foreigners confirmed dead in the army's storming, the Algerian security source told Reuters. One British citizen was killed when the gunmen seized the hostages on Wednesday.

A U.S. official said on Friday that a U.S. Medevac flight carrying wounded of multiple nationalities had left Algeria.

By nightfall on Friday, the Algerian military was holding the vast residential barracks at the In Amenas gas processing plant, while gunmen were holed up in the industrial plant itself with an undisclosed number of hostages.

Scores of Westerners and hundreds of Algerian workers were inside the heavily fortified compound when it was seized before dawn on Wednesday by Islamist fighters who said they wanted a halt to a French military operation in neighboring Mali.

Hundreds escaped on Thursday when the army launched an operation, but many hostages were killed in the assault. Algerian forces destroyed four trucks holding hostages, according to the family of a Northern Irish engineer who escaped from a fifth truck and survived.

Leaders of Britain, Japan and other countries have expressed frustration that the assault was ordered without consultation and officials have grumbled at the lack of information. Many countries also withheld details about their missing citizens to avoid releasing information that might aid the captors.

An Algerian security source said 30 hostages, including at least seven Westerners, had been killed during Thursday's assault, along with at least 18 of their captors. Eight of the dead hostages were Algerian, with the nationalities of the rest of the dead still unclear, he said.

Algeria's state news agency APS put the total number of dead hostages at 12, including both foreigners and locals.

The base was home to foreign workers from Britain's BP, Norway's Statoil and Japanese engineering firm JGC Corp and others.

Norway says eight Norwegians are still missing. JGC said it was missing 10 staff. Britain and the United States have said they have citizens unaccounted for but have not said how many.

The Algerian security source said 100 foreigners had been freed but 32 were still unaccounted for.

"We must be prepared for bad news this weekend but we still have hope," Norwegian Prime Minister Jens Stoltenberg said.

The attack has plunged international capitals into crisis mode and is a serious escalation of unrest in northwestern Africa, where French forces have been in Mali since last week fighting an Islamist takeover of Timbuktu and other towns.

"We are still dealing with a fluid and dangerous situation where a part of the terrorist threat has been eliminated in one part of the site, but there still remains a threat in another part," British Prime Minister David Cameron told his parliament.

"(The army) is still trying to achieve a ‘peaceful outcome' before neutralizing the terrorist group that is holed up in the (facility) and freeing a group of hostages that is still being held," Algeria's state news agency said on Friday, quoting a security source.

MULTINATIONAL INSURGENCY

Algerian commanders said they moved in on Thursday about 30 hours after the siege began, because the gunmen had demanded to be allowed to take their captives abroad.

A French hostage employed by a French catering company said he had hidden in his room for 40 hours under the bed before he was rescued by Algerian troops, relying on Algerian employees to smuggle him food with a password.

"I put boards up pretty much all round," Alexandre Berceaux told Europe 1 radio. "I didn't know how long I was going to stay there ... I was afraid. I could see myself already ending up in a pine box."

The captors said their attack was a response to the French military offensive in neighboring Mali. However, some U.S. and European officials say the elaborate raid probably required too much planning to have been organized from scratch in the single week since France first launched its strikes.

Paris says the incident proves its decision to fight Islamists in neighboring Mali was necessary.

Security in the half-dozen countries around the Sahara desert has long been a preoccupation of the West. Smugglers and militants have earned millions in ransom from kidnappings.

The most powerful Islamist groups operating in the Sahara were severely weakened by Algeria's secularist military in a civil war in the 1990s. But in the past two years the regional wing of Al Qaeda gained fighters and arms as a result of the civil war in Libya, when arsenals were looted from Muammar Gaddafi's army.

Al Qaeda-linked fighters, many with roots in Algeria and Libya, took control of northern Mali last year, prompting the French intervention in that poor African former colony.

The apparent ease with which the fighters swooped in from the dunes to take control of an important energy facility, which produces some 10 percent of the natural gas on which Algeria depends for its export income, has raised questions over the value of outwardly tough Algerian security measures.

Algerian officials said the attackers may have had inside help from among the hundreds of Algerians employed at the site.

U.S. Defense Secretary Leon Panetta said those responsible would be hunted down: "Terrorists should be on notice that they will find no sanctuary, no refuge, not in Algeria, not in North Africa, not anywhere. ... Those who would wantonly attack our country and our people will have no place to hide."

(Additional reporting by Ali Abdelatti in Cairo, Eamonn Mallie in Belfast, Gwladys Fouche in Oslo, Mohammed Abbas in London, Padraic Halpin and Conor Humphries in Dublin, Andrew Quinn and David Alexander in Washington; Writing by Philippa Fletcher and Peter Graff; Editing by Andrew Roche, Tom Pfeiffer and Jackie Frank)

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Fate of two Malaysians unknown in Algerian crisis

KUALA LUMPUR: The fate of two Malaysians believed to have been caught up in the ongoing hostage crisis at a gas complex in the Algerian desert remains unknown, the foreign ministry said Saturday.

It said that three other Malaysians who were working at the gas plant were safe. The embassy in Algeria "is still determining the fate" of the other two, the foreign ministry said in a statement.

Al-Qaeda-linked gunmen stormed the gas plant in eastern Algeria on Wednesday. They have demanded an end to the French intervention in neighboring Mali, according to Mauritania's ANI news agency.

The number of foreigners held at the plant is unclear.

The kidnappers have said they are still holding seven at the site deep in the Sahara desert near the border with Libya. An Algerian security official put their number at 10.

An Algerian security official said a dramatic military assault during the week to rescue those held had left dead 12 hostages and 18 kidnappers dead.

- AFP/ck

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Indo-Pak LoC tension puts Gujarat farmers in a soup

AHMEDABAD: The heat on the Indo-Pak border has squashed tomato prices in Gujarat. Farmers in Kadi, about 40 km north of here, say if trade with the neighbouring nation does not normalize, they will land up in a... what else, tomato soup!

Prices of tomatoes in the wholesale markets in Ahmedabad have plummeted from around Rs 300/20 kg on Saturday to Rs 80/20 kg on Thursday. The corresponding fall in the retail market is only from Rs 20/kg to Rs 15/kg so far, as traders are holding on to stocks or diverting them elsewhere. During the four winter months, farmers in and around Ahmedabad and Gandhinagar usually produce about 5,000 tonnes of tomatoes. Of this, around 600 tonnes go to Punjab and most of it crosses over to Pakistan. On an average, 40 trucks laden with tomatoes leave Kadi every day for Punjab. The outflow from Kadi, which produces 600 tonnes of tomatoes, has come down to just 10 trucks a day, since the border dispute erupted last week. Asif Darbar, a trader from Kadi, said, "Traders from Punjab come to Kadi frequently to purchase tomatoes due to superior quality, but they have stopped coming." Punjabis have also gone missing from the Jamalpur agri-market in Ahmedabad.

But while tomato farmers are left red-faced with war-mongering on both sides, there is good news for consumers. "Export quality tomatoes are grown over 2,000 hectares in Gujarat and the local variety is popular as it is big in size," said DM Vaghela, deputy director, horticulture, Ahmedabad.

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Lilly drug chosen for Alzheimer's prevention study

Researchers have chosen an experimental drug by Eli Lilly & Co. for a large federally funded study testing whether it's possible to prevent Alzheimer's disease in older people at high risk of developing it.

The drug, called solanezumab (sol-ah-NAYZ-uh-mab), is designed to bind to and help clear the sticky deposits that clog patients' brains.

Earlier studies found it did not help people with moderate to severe Alzheimer's but it showed some promise against milder disease. Researchers think it might work better if given before symptoms start.

"The hope is we can catch people before they decline," which can come 10 years or more after plaques first show up in the brain, said Dr. Reisa Sperling, director of the Alzheimer's center at Brigham and Women's Hospital in Boston.

She will help lead the new study, which will involve 1,000 people ages 70 to 85 whose brain scans show plaque buildup but who do not yet have any symptoms of dementia. They will get monthly infusions of solanezumab or a dummy drug for three years. The main goal will be slowing the rate of cognitive decline. The study will be done at 50 sites in the U.S. and possibly more in Canada, Australia and Europe, Sperling said.

In October, researchers said combined results from two studies of solanezumab suggested it might modestly slow mental decline, especially in patients with mild disease. Taken separately, the studies missed their main goals of significantly slowing the mind-robbing disease or improving activities of daily living.

Those results were not considered good enough to win the drug approval. So in December, Lilly said it would start another large study of it this year to try to confirm the hopeful results seen patients with mild disease. That is separate from the federal study Sperling will head.

About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Current medicines such as Aricept and Namenda just temporarily ease symptoms. There is no known cure.

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Online:

Alzheimer's info: http://www.alzheimers.gov

Alzheimer's Association: http://www.alz.org

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Follow Marilynn Marchione's coverage at http://twitter.com/MMarchioneAP

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Algeria ends desert siege, but dozens killed

ALGIERS (Reuters) - Algerian forces stormed a desert gas complex to free hundreds of hostages but 30, including several Westerners, were killed in the assault along with at least 11 of their Islamist captors, an Algerian security source told Reuters.

Western leaders whose compatriots were being held did little to disguise their irritation at being kept in the dark by Algeria before the raid - and over its bloody outcome. French, British and Japanese staff were among the dead, the source said.

An Irish engineer who survived said he saw four jeeps full of hostages blown up by Algerian troops whose commanders said they moved in about 30 hours after the siege began because the gunmen had demanded to be allowed to take their captives abroad.

And while a crisis has ended that posed a serious dilemma for Paris and its allies as French troops attacked the hostage-takers' al Qaeda allies in neighboring Mali, it left question marks over the ability of OPEC-member Algeria to protect vital energy resources and strained its relations with Western powers.

Two Japanese, two Britons and a French national were among at least seven foreigners killed, the source told Reuters. Eight dead hostages were Algerian. The nationalities of the rest, as well as of perhaps dozens more who escaped, were unclear. Some 600 local Algerian workers, less well guarded, survived.

Fourteen Japanese were among those still unaccounted for by the early hours of Friday, their Japanese employer said.

Americans, Norwegians, Romanians and an Austrian have also been mentioned by their governments as having been captured by the militants who called themselves the "Battalion of Blood" and had demanded France end its week-old offensive in Mali.

Underlining the view of African and Western leaders that they face a multinational Islamist insurgency across the Sahara - a conflict that prompted France to send hundreds of troops to Mali last week - the official source said only two of the 11 dead militants were Algerian, including the squad's leader.

The bodies of three Egyptians, two Tunisians, two Libyans, a Malian and a Frenchman were found, the security source said.

The group had claimed to have dozens of guerrillas on site and it was unclear whether any militants had managed to escape.

The overall commander, Algerian officials said, was Mokhtar Belmokhtar, a veteran of Afghanistan in the 1980s and Algeria's bloody civil war of the 1990s. He appears not to have been present and has now risen in stature among a host of Saharan Islamists, flush with arms and fighters from chaotic Libya, whom Western powers fear could spread violence far beyond the desert.

"NO TO BLACKMAIL"

Algeria's government spokesman made clear the leadership in Algiers remains implacably at odds with Islamist guerrillas who remain at large in the south years after the civil war in which some 200,000 people died. Communication Minister Mohamed Said repeated their refusal ever to negotiate with hostage-takers.

"We say that in the face of terrorism, yesterday as today as tomorrow, there will be no negotiation, no blackmail, no respite in the struggle against terrorism," he told APS news agency.

British Prime Minister David Cameron, who warned people to prepare for bad news and who canceled a major policy speech on Friday to deal with the situation, said through a spokesman that he would have liked Algeria to have consulted before the raid.

A Briton and an Algerian had also been killed on Wednesday.

The prime minister of Norway, whose state energy company Statoil runs the Tigantourine gas field with Britain's BP and Algeria's national oil company, said he too was not informed.

U.S. officials had no clear information on the fate of Americans, though a U.S. military drone had flown over the area. Washington, like its European allies, has endorsed France's move to protect the Malian capital by mounting air strikes last week and now sending 1,400 ground troops to attack Islamist rebels.

A U.S. official said on Thursday it would provide transport aircraft to help France with a mission whose vital importance, President Francois Hollande said, was demonstrated by the attack in Algeria. Some fear, however, that going on the offensive in the remote region could provoke more bloodshed closer to home.

The apparent ease with which the fighters swooped in from the dunes to take control of an important energy facility, which produces some 10 percent of the natural gas on which Algeria depends for its export income, has raised questions, over the value of security measures that are outwardly draconian.

Foreign firms were pulling non-essential staff out of the country, which has recovered stability only in recent years and whose ruling establishment, heirs to fighters who ended French rule 50 years ago, has resisted demands for reform and political freedoms of the kind that swept North Africa in the Arab Spring.

"The embarrassment for the government is great," said Azzedine Layachi, an Algerian political scientist at New York's St John's University. "The heart of Algeria's economy is in the south. where the oil and gas fields are. For this group to have attacked there, in spite of tremendous security, is remarkable."

"KILL INFIDELS"

A local man who had escaped from the facility told Reuters the militants appeared to have inside knowledge of the layout of the complex, supporting the view of security experts that their raid was long-planned, even if the Mali war provided a motive.

"The terrorists told us at the very start that they would not hurt Muslims but were only interested in the Christians and infidels," Abdelkader, 53, said by telephone from his home in the nearby town of In Amenas. "'We will kill them,' they said."

Algiers, whose leaders have long had frosty relations with the former colonial power France and other Western countries, may have some explaining to do over its tactics in putting an end to a hostage crisis whose scale was comparable to few in recent decades bar those involving Chechen militants in Russia.

Government spokesman Said sounded unapologetic, however: "When the terrorist group insisted on leaving the facility, taking the foreign hostages with them to neighboring states, the order was issued to special units to attack the position where the terrorists were entrenched," he told state news agency APS, which said some 600 local workers were freed.

The militants said earlier they had 41 foreign hostages.

"ARMY BLASTED HOSTAGES"

Stephen McFaul, an electrical engineer, told his family in Northern Ireland after the operation that he narrowly escaped death, first when bound and gagged by the gunmen who fastened explosives around the hostages' necks and then on Thursday when he was in a convoy of five vehicles driving across the complex.

"(The gunmen) were moving five jeeploads of hostages from one part of the compound," his brother Brian McFaul said. "At that stage, they were intercepted by the Algerian army.

"The army bombed four out of five of the trucks and four of them were destroyed ... He presumed everyone else in the other trucks was killed ... The truck my brother was in crashed and at that stage Stephen was able to make a break for his freedom."

McFaul said it was unclear whether the vehicles had been struck by missiles fired from helicopters or by ground forces.

The attack in Algeria did not stop France from pressing on with its campaign in Mali. It said on Thursday it now had 1,400 troops on the ground there, and combat was under way against the rebels that it first began targeting from the air last week.

"What is happening in Algeria justifies all the more the decision I made in the name of France to intervene in Mali in line with the U.N. charter," Hollande said on Thursday.

The French action last week came as a surprise but received widespread public international support. Neighboring African countries planning to provide ground troops for a U.N. force by September have said they will move faster to deploy them.

(Additional reporting by Ali Abdelatti in Cairo, Eamonn Mallie in Belfast, Gwladys Fouche in Oslo, Mohammed Abbas in London and Padraic Halpin and Conor Humprhies in Dublin; Writing by Alastair Macdonald; Editing by Peter Millership)

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